The best second half for commodities in a generation is pushing U.S. farm incomes and agricultural land prices toward record highs, Bloomberg reported.

At a time when the U.S. jobless rate is 9.6 percent and home prices are weakening, this year’s farm income may top the $87.3 billion reached in 2004, with cropland values increasing as much as 10 percent, said Neil Harl, an agricultural economist at Iowa State University and former adviser to the governments of Ukraine and the Czech Republic.

The Thomson Reuters/Jefferies CRB Index of 19 raw materials has risen 17 percent since the end of June, reflecting higher prices for all commodities. Agriculture led the biggest rally since 1972. Cotton prices surged 76 percent to a record, wheat jumped 48 percent and corn reached a two-year high.

“It will be a phenomenal year for farm income,” said Michael Swanson, a Minneapolis-based senior economist at Wells Fargo & Co., the largest U.S. agricultural lender. “We are not going to rebuild inventories in one year. This will take several years. Farmers are already running flat out, and it will take time for supply to catch up with rising demand.”

The CRB index will rise another 30 percent next year, the most since Richard Nixon was president in 1973, said Michael Pento, the economist at Euro Pacific Capital Inc.

Food prices jumped after drought in Russia and parts of Europe, flooding in Canada and cold in China damaged crops. Cotton rose 77 percent this year, its best performance since 1973, corn gained 32 percent, wheat 31 percent and soybeans 21 percent. The S&P GSCI Agriculture Index added 27 percent, more than twice the advance in the broader S&P GSCI Index of 24 commodities.

That surge may not last beyond next year, because farmers will respond to higher prices by planting more crops, said Daryll Ray, director of the Agricultural Policy Analysis Center at the University of Tennessee in Knoxville. Corn planting will rise to a four-year high in 2011, Informa Economics Inc., a Memphis, Tenn.-based researcher, said in a report.